LDC Graduation: Being ready for global stage is key
Bangladesh would genuinely graduate from the least-developed country bracket only after attaining a certain level of global competitiveness, said noted economist Rehman Sobhan yesterday.
True graduation means competing in global platforms, said Rehman Sobhan, chairman of the Centre for Policy Dialogue, at a session styled 'Upcoming MC12: Bangladesh's Expectations and Possible Stance' organised by the think-tank and Friedrich-Ebert-Stiftung Bangladesh Office.
He went on to cite Pakistan and Sri Lanka as examples of countries that are struggling as developing countries after losing trade benefits upon graduation.
Over the last 50 years, Bangladesh could not negotiate a single free trade agreement (FTA) with any country.
"Bangladesh should have a date by which the country would be able to celebrate genuine graduation. The whole concept of trade negotiation has changed over the years and demanding a one year or three-year extension of duty privilege is absurd in terms of the international trading system."
During FTA negotiations, countries look at labour rights, human rights and competitive electoral systems. "How prepared is Bangladesh in those areas?"
He recommended that trade negotiation and strategies should be approached not just in consideration of the graduation but also in consideration of the changing world order.
"The world that we are dealing with is not as usual," he said.
Sobhan went on to criticise the rules-based trading system under the World Trade Organisation.
"The WTO itself is going through its own crisis and it has already been sent to life support. The rules-based trading system is eroding because trades are now driven by regional and bilateral FTAs and Comprehensive Economic Partnership Agreement."
The US is the main violator of the rules-based trading system, he said, adding that the US has been changing the tariff on Chinese goods every two or three weeks based on political tension between the two nations.
"This makes completely no sense in terms of the rules-based trading system."
Although the developed countries in the Hong Kong Ministerial agreed to duty-free market access for all LDCs, only the US did not follow it.
The American government allowed 97 percent of the goods to enter its territory free of duty and unfortunately, the Bangladeshi apparel items are not included in the 97 percent package, Sobhan added.
The preparations for graduation must start today or tomorrow, said Syed Manzur Elahi, chairman of the Apex Group.
Bangladesh also needs to graduate to overcome its image crisis to the international buyers, he said, adding that buyers demand a big discount from the local suppliers because of the country's poor image.
Moreover, the international buyers also do not want to accept the letters of credit from local banks and need foreign banks like Citi and HSBC to validate them. The re-confirmation process adds 3 to 4 percent to the costs, he said.
The graduation will improve the image and credit rating of banks and the country's branding abroad, he said.
In the post-Covid world, the buyers are negotiating with the sustainability of their business in mind whereas in the pre-pandemic time they talked more about productivity, he added.
"We are extremely revenue-oriented but not investment-oriented. People are invited here for investment but the technologies are not here," he said.
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